PM Forex Strategy

Introducing the PM Forex Strategy:
P - Price Action
M- NonLagMA


Entry:

Illustration 1.
http://img441.imageshack.us/img441/7005/forex.jpg


BUY:
1. When candle 1 closed, the NonLagMa will turn GREEN.
2. Wait for confirmation - if candle 2 closed and the MA is still GREEN.
3. Open a BUY at the open of candle 3

SELL:
1. When candle a closed, the NonLagMa will turn RED.
2. Wait for confirmation - if candle b closed, and the MA is still RED.
3. Open a SELL at the open of candle c.


EXIT:

Illustration 2. Sample of Winning trade as we exit
http://img822.imageshack.us/img822/3898/forexj.jpg

Two ways to EXIT the trade: (we opened a BUY trade on the open of Candle 3), and we exit the trade whether positive/negative pips.

1. On a BUY trade, when we see 3 consecutive candles with LOWER HIGHS, we exit on the open of the following candle. On a SELL trade, when we see 3 consecutive candles with HIGHER LOWS, we exit on the open of the following candle.

OR,
2. On a BUY trade, when the NonLagMA changed to RED was confirmed, we EXIT the trade. On a SELL trade, when the NonLagMA changed to GREEN was confirmed, we EXIT the trade.

- Whichever comes first. In this case, we were supposed to exit the trade "earlier," and did not wait for the NonLagMA to change color.


Illustration 3. Sample of losing trade as we exit.
http://img31.imageshack.us/img31/7005/forex.jpg

As we open the trade at the open of the Candle 3, the next candle closed against our position, and NonLagMA changed color, therefore we exit the trade on a loss at the open of the next candle.


LOTSIZE (updated June 25, 2010):

Lot size will depend on the equity and the minimum allowed by broker.

We will use the 1:1000 integrity for opening the trade. Meaning, the lot size of 0.001 of the equity is to be used everytime we open a new trade.

Example, if our equity is 1000 usd, we will use 1usd per pip. As the equity grows, so will our lot size. Roundup to the nearest dollar.

Let us say the minimum lot size allowed by our broker is 0.01 (10 cents per pip) and our equity is 128 usd, therefore we open 0.01 lot size only.

If our equity reached 151 usd, we open a 0.02 lot size, because we rounded up the lot size.




So far, manual testing from May 1 - June 18 EURUSD on m30 timeframe yielded some 2000 pips. M15 timeframe around 1800 pips. I was hoping someone can make an EA, so together we can test other pair and other timeframes.

Here's the best part, using the "variable" 0.1% of the equity as the lot size, the 10k usd demo account grew to 96k usd!!!

June 26, 2010 Update:
1. PMforex_NonLagMA_v1 made by EllisEdi (updated - http://www.forexfactory.com/showpost...8&postcount=71)

2. MTF-NonLagMAv7.1_4TF_Bar and NonLagMAv7.1 must be downloaded together (MTF untested, with some errors reported)

3. Candle_Time shows the time left before the candle closes

4. #MarketPrice shows the current price in nice big font. Since I dont know how to use most of the indicators that comes with it, I usually turn the OTHER SETTING off - http://www.forexfactory.com/showpost...2&postcount=90



June 27, 2010 Update:
1. Removed the MTF-NonLagMAv7.1 and the NonLagMAv7.1, though it can still be found here, as posted by Vince-AC - http://www.forexfactory.com/showpost...6&postcount=51

2. Adaptive Laguerre Filter indicator uploaded, from LouG's ALF thread - http://www.forexfactory.com/showthread.php?t=239353



July 3, 2010 Update:
1. Removed the following indicators CANDLE TIME and MARKET PRICE, but it can be accessed thru http://www.forexfactory.com/showpost...&postcount=407. Also added the TRENDLINES indicator as uploaded by Syahmi.

2. Added the MP (multi-period) and MTF (multi time frame) NLMA indicator, as uploaded by gspe - http://www.forexfactory.com/showpost.php?p=3848753

3. Reminder, other NLMA versions can be found here, as uploaded by Vince-AC - http://www.forexfactory.com/showpost.php?p=3828616. The NLMAdot indicator is also added in the list - http://www.forexfactory.com/showpost.php?p=3845355

4. Adaptive Laguerre Filter indicator was removed, but there's a more comprehensive discussion here at LouG's ALF thread - http://www.forexfactory.com/showthread.php?t=239353

5. Uploaded a new PMforex template for your perusal.

http://img97.imageshack.us/img97/638/forexg.jpg


SETTINGS:
1. EU (could be other pairs)
2. m15 (could be other TF)
3. MP-NLMA - 7,21,84,336
4. MTF-NLMA - m15, m30, h1, h4

As per suggestion, to avoid CPU overload, you can delete one of the MP or MTF indicator.


ENTRY:
1. If either MP-NLMA or MTF-NLMA has 4 green bars (BUY), or 4 blue bars (SELL), we open a trade.

TP:
1. Usually 10-15 pips. But it all depends on the experience of the trader. Another option is if any 1 or 2 of the MP/MTF bars change colors.

EXIT/SL :
1. Still using the Illustration 2 as shown above.
2. Under study: Use the semafor and Heiken Ashi as exit strategy, as being used by Fokusnik - http://www.forexfactory.com/showpost...&postcount=393


NOTE: If EllisEdi has some free time, and he read this, I hope he can help us come up with the new EA. This existing EA he developed can be found here - http://www.forexfactory.com/showpost.php?p=3835215



August 19, 2010 Update:

1. Added the nice THV Coral indicator, as explained by NiceGuy from this post onwards - http://www.forexfactory.com/showpost...&postcount=554 (Indicator posted by maxwell-eqtn - http://www.forexfactory.com/showpost...&postcount=621)



September 4, 2010 Update:
1. Removed 4BARS-MP-NLMA 1.01.mq4, as NLMA is more useful, and if put together, they eat a lot of cpu resources. But the MP-NLMA indi can still be found here - http://www.forexfactory.com/showpost.php?p=3848753

2. New version of #Market Price (no need for CandleTime indicator), as modified/posted by ducke - http://www.forexfactory.com/showpost...&postcount=686 - #MarketPrice.mq4

3. Nice, sweet and short summaries, as posted by NiceGuy here:
http://www.forexfactory.com/showpost...&postcount=632
http://www.forexfactory.com/showpost...&postcount=654
http://www.forexfactory.com/showpost...&postcount=701

4. New MTF-NLMAv2 by EllisEdi, but "untested" in live environment yet - http://www.forexfactory.com/showpost...&postcount=691 - 4BARS-MTF-NLMA 2.mq4


UPDATED Entry Rules:
http://i54.tinypic.com/35mm9vp.jpg

1. Make a BUY/SELL trade with the direction of the arrow (as provided for by the MTF-NLMA indicator), on the NEXT CANDLE, after the arrow have shown up.
2. Filters:
- PA candle must be small
- PA must be near the TH4 Coral

Look at the samples, the ones with the GREEN lines are good entry points. The ones with RED lines are bad entry points.

Ignore the green/red vertical lines, they indicate london open/close hours; as posted by jimsforex - http://www.forexfactory.com/showpost...&postcount=711


.

Sample of string of wins (except in box)

May 17-19, 2010

http://img341.imageshack.us/img341/2913/forexe.jpg



Sample of string of losses (except in box)

Jun 16-18, 2010

http://img337.imageshack.us/img337/2913/forexe.jpg


After the 150 manual demo trades from May 1 to Jun 18, 2010
74 wins
76 loss

net of 1980 pips

and almost 10x the original equity if we use the variable 0.1% of the equity everytime we open a trade.

WHY? Because trades exited with a loss are usually smaller than trades that exited with a win.

Too bad my programming skills is non-existent.

Have you test this on non trending period?

No offence but i think this works only in trending market.

No offense taken.

With manual testing, we can only do so much, but string of losses is not uncommon too, as shown. But somehow, with our exit strategy, it somehow minimizes the size of losses.

Of course, in some cases, it can also missed out on some huge trends, as we have the tendency to exit early, also shown in the charts above.

I'll select a non-trending period to conduct the back test.

Time will be 1500 to 2359(GMT+8)

Thats the London and US Market.

Thanks for sharing

Your charts indicate you are exiting on 2 lower highs rather than 3.

On shorts you're exiting on 2 higher lows.

Oh, yes, I stand corrected.

http://img202.imageshack.us/img202/2898/forexb.jpg


Candle 0 - reference
Candle 1 - 1st lower H
Candle 2 - 2nd lower H
Candle 3 - EXIT at the open of this candle

Sample of NO Trade.

NO CONFIRMATION - second candle after the change of NonLagMA did not give confirmation.


http://img717.imageshack.us/img717/7005/forex.jpg

Very interesting stuff brother. I have just started giving it a try on m15 and just bagged 50 pips due to sudden movement on jpy pairs. Have you tried the strategy on H1+ Tfs?

Omar

Not yet.

Started out on m15, then m30.


Was really hoping the good EA programmer guys can give this a shot.

Thanks for the review. Keep posting your results and some charts will be great too.

Btw, you are on the right track, this is not a get quick 100 pips strategy, rather than a ride-the-wave-if-with-trend and get-out-if-on-opposite-trend, with a projected 2:1 W/L ratio.

I like simple things like this.

I just bunged $10 on a micro to demo it. I like to demo with a live micro rather than demo especially when using market orders. You get real results rather than perfect execution and fills.

True, the edge of the system comes out only if we suck up the pips of a full swing instead of taking 10/20 quick pips and get out.
On m15, if the entry is good, price will immediately move in your direction without any hassle. And it can give anywhere near 50 pips before the exit signal. So a good stop could be a manual one with candle closing above the candle you entered in a position.
On m15, divide your position in 3. Close first one on 20 pips and move SL to breakeven. Let the remaining ones run to full extent. On 40 pips, close one more position and leave the last running till its either stopped out or exit signal appears. Doing so, many time you will feel that you left pips on the table. But on the longer run, your winning positions will out run the losing ones (You are cashing the position, saving what you put in the trade and also bagging the maximum pips a trade has to offer).

If the entry doesn't work out and bar CLOSES above your entry candle than you are most welcome to enter in opposite direction as soon as the conditions are met

I have a bit different setup than that is posted in the first post. I will post some of my charts in a while.

Just loaded onto GBP/USD and EUR/USD and so far looks pretty good. I will demo it for a bit and see how it goes..

Has anyone created an EA for this?

Hey noel, could you post a tpl?
really like your gray colors and get it quite right.
easy on the eyes.

I whipped this EA out for you guys. I only tested it via the strategy tester so please forward test. I was a bit confused by your Lot size rules so i used a standard formula instead. Since no source code for the NonLagMA indicator (I only have source code for v 7.1) the EA must have the indicator NonLagMA.ex4 in the indicators directory.

The ea is pretty well documented and I beleive the defaults all match your trading system as posted.

Good Luck ...

wow, very fast.....btw just closed EJ 55pips....

don't know if MM set up right. if I change lots to .01, does it mess up MM?
anyway, stuck it on 6 pairs, we will see.

The Money Management in the EA ...

If AutoMoneyManagement is set to false then the Lots value is used as the default lot size amount.

If AutoMoneyManagement is set to true (the default) then Lotsize is calcluated based on the Risk variable, the account balance of your account and the stoploss (which is set to the value of the EmergencyStopLoss by default)

If you want to use MM you can increase the risk number for bigger trades or lower the risk number for smaller trades.

There is also a way to set the stop loss and take profit as a fixed values. this will allow another exit goal in addition to the ones mentioned in the method. This will effect the Lotsize if you have AutoMoneyManagement set to true.

Mark

Do you have a rule for SL?
Sasa

OK, well when you said you used a standard formula I didn't know if you meant lots. so it will break it down in to mini lots.
Also, here is a pic. It looks like this should be a short as I understand it.
No trades yet.